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Posted on October 18, 2023 by Srinu Kalyan

What is free cash flow?

Last Updated: July 2026 | Reading Time: 1 minute

Free cash flow (FCF) represents the residual funds that a company retains following the settlement of its operational costs (OpEx) and capital investments (CapEx). A higher free cash flow enables the company to direct resources toward rewarding shareholders through dividends, reducing existing debt, and pursuing avenues for expansion and development. This surplus capital, indicative of a company’s financial health, plays a pivotal role in fostering sustained growth and facilitating strategic decisions to bolster long-term stability and competitiveness.

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Srinu Kalyan

Srinu Kalyan

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